Currency Trading Summary

U.S. Dollar Trading (USD) was weaker in general as stock markets remained positive and commodities continued to rally off recent lows. December Pending Home Sales rose 1% as forecast. In US stocks DJIA +111 points closing at 10286, S&P +14 points closing at 1103 and NASDAQ +18 points closing at 2190. Looking ahead, January ISM services are forecast at 51 vs. 49.8 previously. Also released, January ADP employment report forecast at -30k vs. -84k previously.

The Euro (EUR) continued edging higher as sentiment and investor confidence improved. EUR/JPY rallied towards resistance at 126.60. The Key 1.4000 level will come back into focus if the rebound can continue and will closely watched by technical traders. Overall the EUR/USD traded with a low of 1.3885 and a high of 1.3978 before closing at 1.3960. Looking ahead, December Retail Sales forecast at 0.4% vs. -1.2% m/m.

The Japanese Yen (JPY) was slightly stronger against the USD but most crosses were buoyed by improved risk appetite. USD/JPY found solid resistance once again at the Y91 level but is being well support on dips. Overall the USDJPY traded with a low of 90.25 and a high of 90.93 before closing the day around 90.40 in the New York session.

The Sterling (GBP) tracked higher on the weaker USD to test the Psychological 1.6000 level late in the US session but sentiment is still very fragile. Talk of a possible Hung Parliament after the coming elections is one cause for concern as the Debt laden country will need to pass stringent austerity measures. Overall the GBP/USD traded with a low of 1.5901 and a high of 1.5998 before closing the day at 1.5980 in the New York session. UPDATE January Consumer Confidence forecast at 73 vs. 70R previously.

The Australian Dollar (AUD) gapped lower after the RBA shocked the market by pausing at yesterday's meeting. Economist's were predicting a 0.25% rise as recent data suggested the loose monetary policy was no longer necessary. The bank noted Greece debt and China tightening concerns in the released statement as justification for the pause. The Aussie recovered some of the losses later in the day as commodities rallied. Overall the AUD/USD traded with a low of 0.8778 and a high of 0.8926 before closing the US session at 0.8865. Update December Trade Balance at -2.25bn vs. -2.4bn previously.

Oil & Gold (XAU) continued the impressive move higher to gain another $10 an ounce throughout the day. Overall trading with a low of USD$1098 and high of USD$1119 before ending the New York session at USD$1115 an ounce. Accelerated the rally seen from Monday to gain another $2 a barrel. Crude Oil was up +$2.65 ending the New York session at $77.10.